The National Labor Relations Board announced Tuesday that it was expressly expanding the scope of its traditional “make whole” remedy to require employers to compensate wrongfully terminated employees for all “direct or foreseeable pecuniary harm.”
Historically, the Board’s remedy for unfair labor practices has been limited to lost wages and benefits; reinstatement to the employee’s former position or a substantially similar position; and, more recently, search-for-work and interim employment expenses incurred because of an unlawful discharge. Now, the Board also will order employers to pay for additional pecuniary losses that are the “direct or foreseeable” result of an unfair labor practice. This may include out-of-pocket medical expenses, credit card debt and other costs or penalties that an employee may not have experienced absent the employer’s unlawful conduct. The burden of proving these additional damages is on the NLRB and will be addressed in Board compliance proceedings. The decision will apply retroactively to all pending cases.
The case, Thryv, Inc., was a 3-2 decision, with the majority made up of the Board’s Democratic appointees. The majority declined to label the expanded remedy “consequential damages,” explaining instead that its decision is grounded in statutory principles and Board precedent. The majority said that the remedy is neither “extraordinary” nor punitive. Board members John Ring and Marvin Kaplan dissented, saying the new standard opens the door to speculative damages.
The Board rejected requests to expand the remedy to include pain and suffering, emotional distress, attorneys’ fees and front pay but appeared to leave the door open for such claims in the future.
NLRB General Counsel Jennifer Abruzzo would go even further than the Board, as indicated by memoranda she released last year (GC 21-06 and GC 21-07) directing regional offices to seek “full remedies.” As a result, employers should expect to face tougher obstacles to settling cases at the regional office level.
The NLRB’s decision comes after it invited parties and amici to submit briefs last year addressing whether the Board should expand its traditional make-whole remedy to account for other economic losses.
Opinions and conclusions in this post are solely those of the author unless otherwise indicated. The information contained in this blog is general in nature and is not offered and cannot be considered as legal advice for any particular situation. The author has provided the links referenced above for information purposes only and by doing so, does not adopt or incorporate the contents. Any federal tax advice provided in this communication is not intended or written by the author to be used, and cannot be used by the recipient, for the purpose of avoiding penalties which may be imposed on the recipient by the IRS. Please contact the author if you would like to receive written advice in a format which complies with IRS rules and may be relied upon to avoid penalties.
[View source.]
